Lin Benli: It's wise to plan for retirement early! New passive income can earn 400,000 effortlessly.

Host: Mr. Lin, you often mention the concept of retirement planning to students. When should one start?

Lin Benli: Of course, the earlier, the better. I often emphasize that young people in their first ten years in the workforce should not focus too much on investing, as their principal is usually quite small. I know some young individuals who are eager to speculate in the stock market after saving just a few tens of thousands, which is actually quite risky.

I advise young people to save steadily, aiming to set aside about 30% of their income each year. Assuming you earn over ten thousand dollars a month and save five thousand each month, you could accumulate sixty thousand dollars in a year. After eight to ten years, with reasonable investment returns, you should be able to amass six to seven hundred thousand dollars, at which point you can begin to establish your investment portfolio.

If there is a future housing need, there is no need to worry about current high property prices. In fact, property prices have already fallen by nearly 30% from their peak, especially for smaller or nano-sized apartments. If you live alone and choose a unit of about 300 square feet, the current average price for second-hand properties is about nine to ten thousand per square foot, totaling around three million dollars. If you have a stable monthly income of twenty to thirty thousand dollars, you could potentially secure a mortgage of 80% to 90%, meaning you do not necessarily need to save a full 30% deposit.

With proper planning, over a career spanning thirty to forty years, one should be able to accumulate sufficient retirement funds.

From grassroots to middle class, how can one accumulate retirement funds?

Lin Benli: I am referring to ordinary citizens, not those elite individuals who have high starting salaries or earn a million annually right after graduating from university. An average citizen may start with a monthly salary of fifteen thousand, gradually advancing to a middle management position with a salary of twenty to thirty thousand. As long as they persistently save and invest, purchasing a three million dollar apartment is actually not out of reach.

In addition, do not forget that you also have the Mandatory Provident Fund (MPF), which constitutes approximately 10% of your salary each month. Assuming you work for 30 to 40 years, along with reasonable returns (for instance, a stable core fund may yield 4% to 5%, or even 6% to 8%), you can accumulate a substantial retirement savings over the long term.

If you are bold in your investments while young, putting all your funds into stocks, historical data shows that the long-term average return on global stocks exceeds 10%. By continuously investing for 30 to 40 years, you should be able to accumulate at least two million dollars in retirement funds by the time you retire.

Make good use of the 'Three Treasures of Retirement' to be more flexible in generating long-term income.

Lin Benli: When discussing retirement, one cannot overlook the 'Three Treasures of Retirement' introduced by the government in recent years, which include: annuities, reverse mortgages, and interest income.

These tools significantly enhance the ability to generate long-term income after retirement, which is far better than the days of relying solely on deposit interest or rental income over a decade ago.

1. Reverse Mortgage

If you own property and do not intend to leave it to heirs, you may consider using it as a reverse mortgage. For example, a property valued at seven million dollars could allow for monthly withdrawals of over sixteen thousand dollars, while you can continue to live there for the rest of your life.

2. Elderly Living Allowance

If you qualify, each couple can receive up to 8,500 HKD per month (4,250 HKD per person), totaling over 100,000 HKD in a year. However, please note that if you apply for the allowance, your liquid assets must not exceed 610,000 HKD; otherwise, you will be considered over-asset and lose eligibility.

3. Annuity

You may consider using part of your funds to purchase a government lifetime annuity. For example, if both spouses buy 1.2 million HKD each, totaling 2.4 million HKD, you could receive about 13,000 HKD per month until the end of your life.

Property Strategy: Do Not Blindly Become a "Property Slave"

Lin Benli: Many people are concerned about the pressure of mortgage payments, but with reasonable planning, mortgage repayments should not become a burden.

According to statistics, the median monthly income for individuals aged 35 to 44 is approximately 28,200 HKD. I believe that for an average worker, earning 15,000 to 16,000 HKD per month is not difficult; with effort, it is common to be promoted to a mid-level management position earning between 20,000 to 30,000 HKD.

It is advisable to keep the mortgage ratio between 30% and 40%, and ideally not exceed 50%. For example, with a monthly income of 28,000 HKD, making payments of over 10,000 HKD for 30 years is a relatively prudent arrangement.

Currently, the mortgage burden ratio in Hong Kong (calculated using the P-rate or H-rate) is 44% and 38%, respectively, which remains at a reasonable level. Remember, it is not necessary to pursue a "starter home" costing five million HKD; in fact, an average living space of over 200 square feet per person is already quite comfortable.

When my wife and I got married, we lived in a space of over 400 square feet. After having children, we moved to over 600 square feet, and at the most, five of us lived in 800 to 900 square feet. Now, each of the five of us has an average of over 200 square feet, which is very spacious. Living in a larger space, on the other hand, increases management fees, rates, and cleaning burdens.

Investment Income to Support Retirement: My Practical Insights

Lin Benli: Over the past few years, I have generated more than one million HKD in passive income through investments each year, and in the past two years, due to rising interest rates, it has reached 2.1 million HKD. This income allows me to sustain my living without relying on teaching work, and even to make more charitable donations.

In the past two years, I have purchased two small to medium-sized units for rental purposes, achieving a return of over 3%. As rental income has increased and contributions have relatively decreased due to rising interest rates, a virtuous cycle of 'increasing rent and decreasing contributions' has formed.

Since my early retirement from PolyU in 2011, I have started teaching financial management courses, using the course proceeds to support young people in attending classes for free. My investment strategies and financial advice are all based on my own practical execution, as described in the book.

The financial management book I published is already in its third edition, with a fourth edition about to be printed. The book summarizes my insights from the past fourteen years, including how to save, invest, purchase property, and plan for retirement, all drawn from my own practical experience, and I hope it will inspire and assist readers.

Reminder: Beware of impersonation, ensure you recognize official channels.

Host: Finally, there are audience members concerned about online scammers using your name to defraud. How can this be avoided?

Lin Benli: Indeed, there have been many people impersonating my name recently, even using clips from platforms like Futu to commit fraud. I would like to remind everyone that if you wish to obtain firsthand, accurate financial information, you should subscribe through my official website and not be misled by videos or investment advice from unknown sources.

Retirement planning is not something to be considered only when getting old; it should start as soon as one enters the workforce. By adopting a comprehensive approach of 'savings + investment + property + effective use of government tools (the three retirement treasures)', even ordinary citizens can live with dignity and quality after retirement.

I hope every audience member can start preparing for their future from today. We will meet again in the next episode!